China auditors uncover $35bn scam

Chinese auditors have uncovered $35 billion of funds illegally spent by government offices in the first 11 months of this year.

26 Dec 2005 11:38 GMT

Corruption is endemic and has grown hand in hand with reforms

State media said on Monday the improper spending was found during an annual audit of 22,000 officials across the country by the National Audit Office.

Details of the wrongdoings were not given, but previous reports about misspending involved officials using public funds to build apartments for employees or to give themselves bonuses.

About 196 of the officials who violated laws and regulations were disciplined by their supervisors or prosecuted in court, the Xinhua news agency said in a report, which cited sources with a national audit conference that opened in Beijing on Monday.

The annual audits, the findings of which have been revealed to the public only in recent years, are an attempt by the government to stem a rising tide of corruption, which is hurting the Chinese Communist Party's image and stirring ordinary people's anger against the government.

Corruption is endemic in China and has grown during its economic reform period, threatening the legitimacy of the communist government, the Organisation for Economic Co-operation and Development, OECD, said earlier.

In a report, the OECD said corruption represented between 3% and 5% of China's gross domestic product, or between $50bn and $84 billion in 2004.